AutoNation Inc. AN reported a 5% year-over-year increase in total retail sales of new vehicles to 31,777 units in May 2015. On a same-store basis, retail new vehicle sales rose 3% year over year.
AutoNation also celebrated the sale of its 10 millionth vehicle. According to the company, no other automotive retailer was able to achieve this target. In order to celebrate the achievement of this milestone, the company is giving away three vehicles, one each in Florida, Texas and California.
Segmental Results
Retail new vehicle unit sales in AutoNation’s Domestic segment increased 6% to 9,878 vehicles. The segment comprises retail automotive franchises that sell vehicles manufactured by Ford Motor Co. F, Chrysler and other automakers.
However, sales at AutoNation’s Import segment went down 1% year over year to 15,297 vehicles in May 2015. The segment covers retail automotive franchises that sell vehicles manufactured by Toyota Motor Corporation TM, Honda Motor Co., Ltd. HMC and others.
In the Premium Luxury segment, sales surged 18% year over year to 6,602 vehicles during the month. This segment consists of retail automotive franchises that offer vehicles manufactured by Mercedes Benz, BMW, Lexus and other carmakers.
U.S. Auto Sales
Rising U.S. auto sales are contributing to AutoNation’s sales growth. U.S. light-vehicle sales increased 1.6% year over year to 1.63 million units in May 2015. This is a record high for May sales. Sales on a seasonally adjusted annualized rate (“SAAR”) basis surged to 17.78 million units in May 2015, increasing from 16.52 million in Apr 2015 and 16.73 million in May 2014. This is the highest SAAR since Jul 2005.
The impressive sales volume was driven by strong demand for light trucks, along with crossovers and SUVs. These vehicle segments have been gaining from low gas price as well as the easy availability of credit with lower interest rates and longer repayment periods. Attractive Memorial Day deals also acted as catalysts, boosting May sales further.
Zacks Rank
AutoNation currently carries a Zacks Rank #2 (Buy).
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